Tag: south-south cooperation

African leaders, more than a “benevolent” China, should set the tone for Africa-China relations, argues Kofi Gunu

By Kofi Gunu

When I first became aware of China’s growing influence in Africa, I was only ten years old. Ghana was set to host the 2008 African Cup of Nations, the continent’s biggest soccer competition, and work was progressing steadily on a new multipurpose stadium in my hometown, Tamale—one of the tournament’s host cities. Our remote savannah town swirled with rumors about the Chinese construction firm undertaking the project and the files of Chinese foremen who marched chain gang-style to the construction site each morning. I recall my Catholic priest explaining once that the contractor, apparently frustrated with the negative work ethic of his Ghanaian laborers, had replaced all but a few of them with convict labor imported from China.

Later I would learn that this was nothing more than a myth, one of many urban legends concocted by locals trying to make sense of the strangers in our midst. But for a long time afterwards, the imposing Tamale Stadium stood in my young mind as a symbol of China in Ghana and Africa, at once shrouded in mystery and impossible to ignore.

The scale of China’s involvement in Africa is a point of surprising contention. Western politicians and media, alarmed at the significant diplomatic, economic, and military roles China has assumed on the continent, often exaggerate its efforts. Chinese experts, eager to assuage these fears, hasten to cite studies which show that Chinese investment and aid to Africa is safely smaller than the West’s.

However, nothing can obscure the truth that China is Africa’s biggest economic partner now and into the foreseeable future. China is currently Africa’s largest trading partner. Additionally, according to the Bilateral FDI database and McKinsey, China is poised to surpass the US as Africa’s largest source of foreign direct investment (FDI) stock within the next decade Chinese official development assistance (ODA) and other official flows (OOF) to Africa together added up to 6 billion USD in 2012, making China the third largest country donor to the continent. Besides, since 2012, loan issuance by Chinese institutions to African governments has tripled accounting for approximately one-third of all new sub-Saharan African government debt.

A recent groundbreaking report from Mckinsey & Company, that sought to evaluate Africa’s economic partnerships globally, showed China among the top four partners for Africa across five key dimensions: trade, investment stock, investment growth, aid, and infrastructure financing.

Source: Dance of the Lions and Dragons, McKinsey & Company, Jun 2017

To objectively analyze China’s footprint in Africa, we must first arrive where reality is. The reality is that China is indispensable to Africa’s development agenda.

This reality is one that many on the continent acknowledge but with mixed feelings. A recent large-scale public opinion survey showed that ordinary Africans appreciate the infrastructural development that closer ties with China has brought. Chinese-led projects and businesses also employ several million people across Africa. African policymakers, a growing number of them Chinese-educated, increasingly look to China, rightly or not, as a model for catalyzing growth and eradicating poverty.

These positive reviews notwithstanding, legitimate questions persist about the motives behind Chinese assistance. Resource-for-infrastructure deals, which may make perfect financial sense to Chinese bankers, set off loud alarm bells on a continent whose vast mineral wealth has been used to enrich everyone but its own people. Citizens decry a political elite that appears incapable of looking beyond narrow political considerations to safeguard Africa’s interests. With a few notable exceptions, African governments lack defined China strategies, master plans for translating increased investment in priority sectors into sustainable development or for ensuring technology and skills transfer. They are waiting for Chinese firms to take the initiative. This lack of confidence in our leaders, far more than a crisis of explanation as proposed in a blog entry by Shou Huisheng earlier this week, is the main reason Africans remain apprehensive about this budding partnership.

Take, for instance, tensions sparked by the influx of hundreds of thousands of Chinese migrants to Africa in recent years. In Ghana, these tensions are felt most acutely in the small-scale mining sector, where the arrival of Chinese prospectors with machinery and heavy equipment has transformed a hitherto unsophisticated industry into a major driver of ecological catastrophe. Galamsey, as the practice is commonly known, has caused irreversible damage to protected forests and polluted vital water bodies. Matters got to such a point that the government was forced to impose a blanket ban on small-scale mining last year and to arrest several Chinese operators, over the objections of the Chinese ambassador. But far from being placated, many Ghanaians continue to point fingers at the authorities for permitting Chinese nationals to flout the country’s laws in the first place. To quote a caller on a Ghanaian radio program: “The Chinese government will never allow us to go to their country and trash it. Why does our government allow it here?”

The fate of China-Africa relations depends on Africans like this caller who are willing to hold African governments accountable for protecting the continent’s interests as they engage with China. As African heads of state convene in Beijing next month for the Forum on China-Africa Cooperation (FOCAC), ordinary Africans are expecting them to show more agency in articulating a clear and well-prioritized China strategy. China’s presence in Africa will produce win-win dividends, not because benevolent China pre-ordains it, but because farsighted African leaders insist on it.

Kofi Gunu is from Ghana. He graduated from Tsinghua University’s Schwarzman College in 2018 with a master’s degree in global affairs and public policy. Prior to that, he held roles at the Council on Foreign Relations and the Global Green Growth Institute. He is currently completing a year of national service in Accra.

How well can China run its climate foreign aid program outside the UN framework

by Wang Binbin

Editor’s note: Among the numerous types of foreign aid that China gives to other countries, climate aid is one that is still relatively new. First started in 2007, as a way to diffuse increasing international pressure on China for its ballooning carbon emissions, the program has, over the past decade, expanded both in terms of its coverage (from small island states most affected by climate change to a wide range of developing countries across the globe) and its size (from about 10 million USD a year to 300 million based on one UNDP estimation). Just like the AIIB, China’s south-south climate assistance program represents another attempt at reshaping an important aspect of global governance with “Chinese wisdom”. For instance, Chinese climate aid runs outside the United Nations Framework Convention on Climate Change (UNFCCC) regime, which differentiates obligations of developed and developing countries. Under that system, developed countries put money into the Green Climate Fund (GCF) to help developing countries combat climate change. China’s long-standing sensitivity around being recognized as a developing country, combined with its urge to show leadership on a key global issue, has prompted it to come up with its own version of climate aid that is not without institutional challenges. Wang Binbin’s new blog is an update of the latest development under this program, after the recent creation of a “China AID”, in the fashion of USAID and UK’s DFID.

One of the most closely-watched changes to come out of China’s recent ministerial shake-up was the creation in mid-April of the China International Development Cooperation Agency (CIDCA), equivalent to the United States Agency for International Development (USAID) or the United Kingdom’s Department for International Development (DFID) – agencies responsible for administering foreign aid and development assistance.

Although this sub-ministerial body does not have an official website yet, it got off to a quick start, announcing on May 16 that China would send emergency humanitarian aid to Kenya in response to severe flooding.

Despite its still undefined make-up and responsibilities, observers are already speculating about how the creation of CIDCA will affect China’s overseas aid, the Belt and Road Initiative, and wider South-South cooperation, including China’s climate change foreign aid to other developing countries.

Climate aid with “Chinese characteristics”

China’s South-South climate cooperation has focused on providing aid to less developed nations commensurate with its position as the world’s largest developing country. The country’s overseas aid has had a climate change component for more than a decade and this has expanded over the years.

In 2012 the National Development and Reform Commission (NDRC) announced that funding would be doubled for climate change aid to about US$72 million a year. Subsequently, a project to donate materials to help countries respond to climate change got underway, headed by the NDRC’s Department of Climate Change and funded by the Ministry of Finance. Notably, this included the donation of a meteorological satellite to Ethiopia.

In September 2015, before the Paris climate conference, China stepped up its commitment when Xi Jinping announced a 20 billion yuan (US$3.1 billion) South-South Climate Cooperation Fund. Two months later, in Paris, the government clarified its scope: from 2016 China would fund 10 low-carbon demonstration projects, 100 climate change adaptation and mitigation projects, and 1,000 training places in developing nations (the “10-100-1000” plan).

More recently, the 19th Communist Party of China National Congress work report stressed that China would cooperate internationally on climate change to contribute to and lead in the construction of an international “ecological civilization”.

When it comes to international climate governance, China views developed nations as having a responsibility to developing countries, owing to their historical emissions of greenhouse gases. In contrast, China is assisting developing nations out of a sense of climate justice rather than obligation. This has shaped China’s climate aid program, which is “voluntary” and “supplementary”, and stands separate from that of developed nations, which are channeling climate finance contributions through the Green Climate Fund (GCF), a United Nations mechanism to help developing nations counter climate change.

Following the decision by President Trump to withdraw the United States from the Paris climate accord, China’s actions have been closely watched, as its pledge of 20 billion yuan to the South-South Climate Cooperation Fund was part of the Obama-Xi Joint Statement in 2015 that was made shortly before the Paris talks started. In that statement, the US made an equivalent pledge of US$3 billion to the Green Climate Fund. President Trump has said that the US will not honor the US$2 billion that remains to be paid to the GCF, while China appears committed to carry out its promised plan.

The shoe doesn’t fit

Providing direct material aid and training is relatively straightforward. However, other elements of the “10-100-1000” plan had to be implemented within a framework that was not fit for purpose. The mismatch prevented plans going ahead as scheduled.

The first issue was funding. The NDRC is responsible for macro-level planning and has no overseas remit. The Ministry of Finance’s rules require that the NDRC’s South-South climate cooperation spending and procurement take place inside China. The “10-100-1000” plan, therefore, had to be designed to fit that requirement, with the 100 mitigation and adaptation projects limited to material donations – and to those goods that could be purchased in China. This affected both the quality and pace of project delivery.

Similarly, the 10 low-carbon demonstration projects were originally intended to happen in industrial zones or residential neighborhoods in recipient countries, promoting general low-carbon development practices (in planning, management and infrastructure construction). But again, the requirement for procurement in China hindered progress.

Then there were personnel issues. As the only option was to buy goods at home, the NDRC’s Department of Climate Change needed to quickly develop new competences to ensure quality procurement: tendering processes, technical workflows, product standards, financial reporting, working across languages, negotiating, and assessing the needs of different nations. This was clearly too much to expect from a department previously responsible for climate change policy.

The final issue was communication. The domestic role of the NDRC means it has no direct links with other countries and so no way to directly communicate with recipient nations.

While the Ministry of Foreign Affairs traditionally handles overseas relationships, China’s expanding links with the rest of the world mean that the Ministry’s embassies abroad were already stretched. Although willing to help implement the plan, they lacked sufficient capacity to do so.

Faced with these constraints, those in charge had to come up with alternative approaches. For example, in August 2016 the NDRC’s Department of Climate Change toured south-east Asia, with the help of Oxfam, an international NGO, to assess the needs of developing countries. This helped to refine the “10-100-1000” plan and work around the department’s lack of international links.

The Department of Climate Change and the UN Development Program then held a “matchmaking” meeting to connect the needs of developing nations with types of support that China could provide.

The reorganization of China’s cabinet ministries, announced at China’s Lianghui (Twin Sessions) in March of this year, brought seismic changes for climate and environmental governance, with responsibility for climate change reassigned from NDRC to the new Ministry for Ecology and Environment (MEE), which was formally established on April 16. Two days later, CIDCA was created, taking overseas aid responsibilities from the commerce, foreign affairs and finance ministries.

Future South-South climate cooperation is likely to take place within a joint MEE-CIDCA framework. This will help to resolve issues with funding, personnel and international links.

CIDCA is run by former NDRC vice minister Wang Xiaotao (pictured). On April 23, Zhou Liujun, former head of the Ministry of Commerce’s Department of Outward Investment and Economic Cooperation, and Deng Boqing, former ambassador to countries including Nigeria, were appointed as vice-directors. The structuring of the two new bodies should be completed by the end of June.

The fact that the top three officials for CIDCA have been drawn from China’s powerful macro-economic planning department, its commerce department, and its foreign affairs apparatus bode well for its ability to coordinate with these ministries.

We can expect that arrangements for the “10-100-1000” plan will be improved once governance structures are clearer. While the changes should not have much impact on the more straightforward training program, the 100 adaptation and mitigation projects will be able to deploy a more flexible approach to aid that is not restricted only to material donations procured domestically.

CIDCA will benefit from established overseas aid systems moved over from the Ministry of Commerce (including material aid, turn-key project delivery, technical cooperation and training). This will mean MEE can more easily make use of CIDCA capabilities when designing South-South climate cooperation projects. Researchers also predict that development attachés may be stationed in Chinese embassies to manage China’s overseas aid. This would solve the lack of international links.

Most eagerly anticipated are the 10 low-carbon demonstration projects. Although initial work on these projects was hampered, a lot of planning has been done and resources are in place.

The new framework will allow MEE and CIDCA to work together to better combine aid, investment and trade. And the model of government-set standards to guide private investment and create green investment is regarded by some experienced figures as the ideal model for those demonstration projects.

Three relationships

It is worth noting that China’s arrangements for South-South climate cooperation were not originally limited to the “10-100-1000” plan.

In 2014, China donated US$6 million to support the UN secretariat’s promotion of South-South climate cooperation. In April that year the funding was used as seed capital for a Southern Climate Partnership Incubator (SCPI) announced by Ban Ki-moon. The SCPI is designed to foster partnerships (both bilateral and multilateral) to allow less developed countries to engage in policy exchange, capacity building, and to have access to technologies and knowledge that facilitate climate action.

Combined with the “10-100-1000” plan, China’s use of UN platforms represents a combination of domestic and international approaches to climate change cooperation.

Pushing China’s South-South climate initiative at the UN level has several advantages: it is intrinsically more multilateral, it is not limited by China’s own rigid bureaucratic and financial restrictions, and it takes advantage of the UN’s global reach.

The ministerial shake-up makes efficient implementation of the “10-100-1000” plan possible. Meanwhile, China’s support for South-South climate cooperation under the UN system is growing and starting to attract civil society forces. For example, the Qiaonyu Foundation donated 100 million yuan (US$15.6 million) for South-South climate cooperation, with US$1.5 million going towards running the SCPI.

In January this year the foundation signed an agreement with the United Nations Office for South-South Cooperation launching the Qiao plan, which will use the UN to identify potential recipients of funding.

South-South climate cooperation can be expected to take place between the Chinese government and the UN, across Chinese government departments, and between the government and civil society.

If those three relationships promote and strengthen each other, resulting in projects that meet recipient nation needs while furthering mitigation, adaptation, poverty-relief and environmental protection, then South-South climate cooperation will be successful.

Wang Binbin is a research fellow at Peking University’s International Organizations Research Institute. Parts of this article, first published on chinadialogue, are taken from the her new book, From Zero to Hero: China’s Transition on Climate Communication and Governance, published April 2018 by the Social Sciences Academic Press.

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This blog is started by those who aspire to tell a better story about China’s involvement beyond its borders. We are journalists, campaigners, analysts, scholars and practitioners with years of experience navigating Chinese politics, bureaucracy, finance and their ramifications overseas.

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Ma Tianjie

Founder/Editor

Ma Tianjie has been involved in policy analysis and environmental advocacy in China for over a decade. He also runs Chublic Opinion, a popular Chinese public opinion blog. He was an English major at Peking University and later earned his Master’s degree in environmental policy from American University. His areas of interest include China’s overseas footprint, environmental governance and online public opinion.

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Calvin Quek

Editor

Calvin is a Visiting Fellow at the Tsinghua University Finance and Development Center, focusing on green finance development in developing countries. He is also head of Greenpeace East Asia’s Sustainable Finance Program and leads its engagement of the financial community. In the past, Calvin served on the Board of the China Carbon Forum, and was the first Executive Director of the Beijing Energy Network. Prior to coming to China, Calvin worked at Citigroup for close to a decade. Calvin has an MBA from Peking University, and an MSc in Wealth Management from Singapore Management University.

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Tom Baxter

Editor

Tom Baxter works in communications at Greenpeace East Asia covering climate and energy issues ranging from air pollution to Chinese overseas investments. He works in the intersections between journalism and the NGO world and his writing has previously appeared in The Economist, South China Morning Post, China Dialogue, and elsewhere. Tom studied history at the University of Glasgow and Hong Kong University. His interests include China’s increasing global influence and the role of the media as an agent in public debate. He also maintains a keen interest in literature and the Chinese language.